How to Sell CDs: Offer Free Stuff

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How to Sell CDs: Offer Free Stuff

"Value add."

That's the buzzphrase floating through the recording industry, as execs at the major labels search for ways to make consumers continue to purchase CDs in a peer-to-peer, file-trading world where music comes free and on demand.

Using a music-recognition technology that verifies that a specific CD is in a computer's CD-ROM drive – in this case Bowie at the Beeb – the technology uses a "key" from the disk to search for the free tracks available to those who purchased the album.

"This really allows the labels to provide content after a CD has been taken home," said Gracenote President David Hyman.

Along with the song-recognition software, major labels have other marketing tools at their disposal to encourage consumers to continue to purchase music. They can create promotions in which consumers can receive free song downloads, specials on concert tickets, and anything else the labels can dream up.

Gracenote – in an effort to create further demand – has partnered up with audio search engine Gigabeat to help introduce music fans to music that sounds similar to the songs already on their computers.

As with any new technology these days, the Gracenote folks might have gone one step further than the recording industry would like.

The song-recognition software works with MP3 files as well. That's good news for Napster fans. They can now identify the tracks they've downloaded, and then use the new technology to search for other music they like by the artist's music they've downloaded.

No legal worries for Gracenote, though, because the technology itself ostensibly doesn't break any laws. The question is whether the music industry will work with the technology.

Hyman said deals were in the works –- but the ink isn't dry on the contracts yet.

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The Great Nap Mac Attack: File traders of the world, unite.

With all due respect to Mr. Marx, the unveiling of Napster's new Macintosh application should have longer lasting implications to the world than Communism -– and not just because Jobs' disciples can now get free music.

If the already fervent Mac users attack Napster in the way they attacked the iMac (and yes, the Napster application comes in new, pretty colors), the recording industry could be facing an even nastier fight than it already has.

While Macintosh users already had access to the file-trading community through applications like Macster, this is the first official product developed specifically by Shawn Fanning and company. Macster users can even upgrade to the new service, while keeping their Macster identification.

And, to make up for the 16-month wait, Fanning's crew even included some new features. The new service comes with all the fixings: search history, customizable tool bar, dockable chat windows, and drag-and-drop capabilities.

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Microsoft TV: If it's not a business 'til Microsoft gets involved, then watch out broadband home media.

With partner Zoomtown.com, Microsoft will be delivering on-demand entertainment through set-top boxes next year. Consumers will have access to music, television, current movies, and film classics by streaming media through a cable hook-up attached to a set-top box.

And none of this unknown media. Already on board on the film side are Warner Bros., New Line Cinema, and Dreamworks. On the music side, the Windows Media Player 7 comes built in –- although it also comes with the company's digital rights management system, which will depress users who prefer MP3s.

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Virgin Player: Virgin tycoon Richard Branson's Internet radio company – aptly called Radio Free Virgin – launched its new, proprietary player this week.

The 30-channel station streams CD-quality sound across its network.

The kicker is that to get the full experience of the sound and metadata, you have to use the new player. Of course, if you do download the application, an embedded browser can link listeners to album cover art, liner notes, and surprisingly, it will link users to Virgin Megastores online, where they can purchase the music.